IPTV Pirate Fights 25-30 Years Prison, “Facially Absurd” U.S. Govt Calculations

Five men found guilty of criminal copyright infringement in connection with pirate streaming site Jetflicks remain free after being convicted in 2024. In a sentencing memorandum filed at a Las Vegas court, counsel for group leader Kristopher Dallmann describes the government's loss calculations as "facially absurd" in a case featuring "an egregious incidence of the trial tax problem." The sentencing guideline range for Dallmann is an unprecedented 25 to 30 years.

Department of JusticeA complex case that had dragged on for years, in part due to the global pandemic, concluded last summer with the conviction of five men behind pirate streaming service Jetflicks.

The court heard that Kristopher Dallmann, Douglas Courson, Felipe Garcia, Jared Jaurequi and Peter Huber, generated millions of dollars in revenue through what was described as one of the largest pirate sites in the United States.

The Case That Refuses to End
Last summer, a jury found all five men guilty of conspiracy to commit criminal copyright infringement. Dallmann was further convicted on two counts of money laundering by concealment, plus three counts of misdemeanor criminal copyright infringement. No sentencing date was announced at the time, but the reported maximum sentences suggested that the defendants were in for a tough ride.

Four of the men were told they could receive up to 60 months in prison, but the Department of Justice highlighted that group leader Kristopher Dallmann could face a much higher sentence

The justification for this extraordinary estimate isn’t easily explained. The current docket has close to 700 filings and indictments that date back to 2019, for conduct that concluded in 2017. It’s a case in which two additional defendants pleaded guilty six years ago, one regarding conduct at Jetflicks, the other in connection with Jetflicks and rival streaming service, iStreamitAll.

Argument Over Sentencing Continues
Over the years, sealed filings regularly interrupted the flow of information, a trend that continues today, some 10 months after the defendants’ convictions. None of the five men are currently incarcerated, and after fighting for every inch of ground for the last six years, Kristopher Dallmann isn’t ready to back down now.

In a supplemental sentencing memorandum dated last week, counsel for Dallmann contest the sentence proposed in the Presentence Investigations Report. Since access to the document is restricted, only limited details are available. However, language used by Dallmann’s counsel conveys a strong reaction to the government’s proposals, with an alternative sentencing proposition from the defense helping to establish a best-case scenario.

“Mr. Dallman respectfully asks that the Court to impose a sentence of one-year on the misdemeanor counts, 3 and 4, and a total sentence of thirty-six-months on the felony counts; each count running concurrent to each other,” the memorandum reads.

“This sentence is reasonable and ‘adequately reflects the seriousness of the offense, affords adequate deterrence, promotes respect for the law, provides just punishment for the offense, and protects the public.”

And then the teardown begins.

Government’s Loss Calculations: “Facially Absurd”
Counsel for Dallmann note that their primary focus is to dispute the PSR and the government’s infringement loss calculations, “which are, and this author does not say this lightly, facially absurd,” the submission notes.

“Nor is the Office of Probation any help in conducting these calculations as that agency has relied solely on the government’s facially problematic, and unduly enigmatic, calculations.”

Describing the sentencing guideline calculations as “unresponsive to the actual facts of the case,” the defense says the draconian end result should give the court significant pause.

“The fundamental error of the infringement loss calculations is that, in addition to being almost comically speculative, it ignores the business model at issue. This case does not involve the retail purchase of individual television shows. At issue is a streaming service that the government alleges failed to acquire the proper reproduction licenses from the actual copyright holders.”

Users of Jetflicks Were Not Victims
The memorandum states that Jetflicks users can’t be classed as victims; they paid for a service and received one. The victims, “to the extent there are any,” are the copyright holders.

“The loss at issue is the licensing fee those holders would have received had Jetflicks acquired the right to stream from those entities. What this amount would have been, if the copyright holders would have even consented, is unknown and undeterminable. What is known is that the government’s loss calculations bear almost no resemblance to actual copyright holder losses.

“The problem with the calculations, lies in the government’s pedantic reliance on the concept of retail value when that concept applies to physical counterfeited items,” the defense argues. Again, no exact figures are provided but the defense says that the “government’s proffered infringement amount dwarfs, by a literal order of magnitude, the total gross receipts of Jetflicks over its entire lifespan.”

An attempt by the government to explain its calculations lacked reliance on case law, data, or expert analysis; “Indecipherable,” according to the defense.

“To the extent one can tell what the government is attempting to argue, it appears to be counting the same streaming content over and over again.”

MPA Request for Attorney Fees
Counsel for Dallmann highlight several points to explain why the MPA’s suggestion of attorney fees is “inappropriate.” Since the MPA is not a litigant in the case, it can’t be considered a prevailing party. There’s no itemized attorney bill to show costs directly related to the case, and there’s nothing to show which fees are permissible costs.

“If the MPA is the victim in this case, as it claims to represent all impacted copyright holders, that entity has made no effort to determine its losses. Instead, it relies on the government’s facially invalid loss theory,” the memorandum continues.

As far as any costs incurred while assisting the government’s prosecution, “those are not allowable losses as the costs of prosecuting a case are not recoverable as restitution.”

The Trial Tax Problem
In December 2019, Darryl Julius Polo (aka djppimp) pleaded guilty to charges of copyright infringement and money laundering for helping to program Jetflicks and for founding and operating rival platform iStreamitAll. Polo was sentenced to 57 months in prison, with a $1 million forfeiture order covering the proceeds of his offending.

According to Dallmann, the appearance of unproven allegations from Polo’s indictment in the PSR is problematic. Polo is described as a co-conspirator, whereas Dallmann maintains that Polo was a competitor operating a similar but entirely separate business. In practical terms the difference is important; as a co-conspirator, Dallmann can be held vicariously liable for Polo’s infringing business, in addition to conduct directly attributable to his own.

The U.S. government’s headline-grabbing description of Polo’s platform iStreamitAll contained a claim that it had a bigger library than Netflix, Hulu, Vudu, and Amazon Prime. That wasn’t necessarily a statement of fact, it was a claim copied from iStreamitAll’s sales pitch.

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Nevertheless, it’s consistent with iStreamItAll offering a huge library of movies and TV shows, in contrast to Jetflicks which offered TV shows only. According to the defense, a comparison of the services and contrasting government-calculated infringement amounts, show that Dallmann is being punished more severely because he exercised his right to stand trial.

“The government represented in Polo’s signed plea agreement that the infringement amount under § 2B3.5 should be between $250,000 to $500,000. This calculation was based on the value of Mr. Polo’s inventory of infringement materials as found during the execution of search warrants,” the memorandum notes.

“Yet for Mr. Dallmann, because he failed to plead guilty, the government devised an entirely new way of calculating infringement value that increased the figure by literally more than a factor of sixty.”

The government-calculated figure in Dallmann’s case, presented in the still-restricted PSR, is $37,478,436.

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“This is not a question of normal plea-bargaining concessions such as whether acceptance of responsibility reductions apply or whether the government would bring additional charges,” the memorandum continues. “This is a wholesale reformulation of a previously embraced sentencing theory. This raises the appearance, if not the specter, of undue retribution and punishment for the exercise of a constitutional right.”

Argument over calculations and various points of law continues for several pages but the easily missed bottom line, is the government’s position that Dallmann’s offending warrants the most severe sentence ever handed down in an online piracy case.

The government’s conceptual corruption has resulted in a computed Sentencing Guideline range that is stunningly severe. It is reasonable to assert that a white-collar offender should not face a Sentencing Guideline range of twenty-five to thirty years for what is essentially a victimless crime; as the government has failed to show any actual victim losses.

The government’s theory dramatically increases the sentencing exposure of Mr. Dallmann. This conclusion is reinforced by looking to the calculations utilized for the co-defendants, such as Daryl Polo, where the infringement loss is approximately 1.5% of that advanced against Mr. Dallmann despite the fact the government describes Jetflicks and iStreamitAll as being similarly situated.

“Given Mr. Dallmann’s history and characteristics, which a host of mitigating factors as previously briefed under seal, a probationary sentence is warranted in this matter. If incarceration is deemed necessary by this Court, Mr. Dallmann respectfully asks this Court to consider a three-year sentence,” counsel for Dallmann conclude.